• Tax alert: Changes to Employee Share Scheme Tax Laws

Have you sold, leased or purchased a car this Financial Year

The Australian Taxation Office (ATO) has announced that it has extended its data matching capabilities to acquire details from Australian motor vehicle registries. It is expected that the records of two million transactions will be obtained with the sales/transfers and new registrations of vehicles worth $10,000 or greater to be analysed.

Essentially, the ATO is seeking to identify non-compliance with various Australian tax registration, lodgement, reporting and payment obligations, including:

  • Goods and Services Tax (GST)
  • Fringe Benefits Tax (FBT)
  • Income tax
  • Luxury car tax
  • Fuel schemes

The ATO will have access to extensive transaction details, including:

  • details of the purchaser(s), seller(s), licenced dealer, fleet manager, leasing company and the registering person 
  • type of transaction (e.g. new registration, transfer)
  • sale price of the vehicle
  • market value of the vehicle
  • type of intended vehicle use (e.g. private, business)

This is yet another example of the ATO’s continued focus on widening its tax net.  The risk of a tax review is increasing and we’ve highlighted below some of the areas this latest program is likely to expose.

GST

  • incorrect claiming of input tax credits above the luxury car limit
  • failing to pay GST on the sale of vehicles
  • incorrect calculations of GST on the sale of vehicles

FBT

  • incorrect treatment of vehicles that are actually cars as defined for FBT purposes (e.g. some utes)
  • incorrect application of FBT exemption to certain utes and other vehicles 
  • incorrect calculation of “base values” for cars where the statutory formula valuation method has been applied (e.g. incorrectly including or excluding costs such as registration, stamp duty, dealer delivery, optional extras etc.)

FBT & Income Tax

  • business owners who are also employees failing to either pay FBT or “cash out” the benefits and triggering an FBT or income tax obligation.

Fuel tax credits

  • incorrect calculating or claiming of fuel tax credits 

If you believe that you have not met your obligations with regards to GST, FBT, luxury car tax, fuel schemes and income tax for motor vehicles - now is the time to get it right.